Top exec out at medical marijuana company

Updated: 7:30 p.m. | Posted: 12:27 p.m.

The chief executive of one of Minnesota's two medical marijuana manufacturers has left the company after years of financial losses.

Andrew Bachman, LeafLine Labs' co-founder and its chief executive since 2016, is no longer with the company "in any official capacity," the company said in a Thursday statement to The Associated Press. The company's entire 5-member board has also been replaced.

Marijuana plants are grown at LeafLine Labs in Cottage Grove. The lab is one of two Minnesota facilities producing medicinal marijuana.Jeffrey Thompson | MPR News 2015

The statement didn't give a reason for Bachman's exit, and a company official didn't respond to questions about his departure. Bachman didn't respond to a voicemail or text message seeking comment.

But LeafLine has struggled since medical marijuana sales began in 2015 in Minnesota. The Cottage Grove-based company lost $6.9 million in its first two financial years, and documents provided by state regulators to The AP showed LeafLine lost another $5.3 million in 2017.

Two top executives left LeafLine last year and it temporarily scaled back its operations in November during a supply shortage that Bachman blamed on lab testing delays.

LeafLine was founded and backed by several family members of the popular Minnesota nursery Bachman's Floral Garden and Gift Centers, though it's unclear if any family members are still involved at the company after Bachman's exit. LeafLine was one of two manufacturers selected to grow and cultivate medical marijuana in 2014, the year Minnesota's Legislature passed its law.

Minnesota's program is among the most restrictive of 30 states that allow medical marijuana. Using the plant form is banned, and the state limits the availability of marijuana pills and oils to patients with 10 severe conditions. Each manufacturer is required to perform several rounds of testing on their medication and must run four dispensaries across the state.

Those restrictions have made business difficult for both of the state's manufacturers. An audit last year showed the two companies, LeafLine and Minnesota Medical Solutions, had lost a combined $11 million in just two years of legal sales. But while Minnesota Medical Solutions has been trending in the right direction — it turned a small profit in 2017 — LeafLine has lost more money each year it's been in business.

After losing $4.7 million in 2016, a financial audit shows the company lost another $5.3 million in 2017. All told, LeafLine has lost more than $12 million in its three years of operations.

The company also struggled late last year with supply, turning away some patients and temporarily closing a storefront in Eagan due to what Bachman said was a delay in the state-mandated, third-party testing of its medication.

This isn't LeafLine's first brush with turnover. Bachman was the company's fourth chief executive since the company formed in 2014. He took over after Manny Munson-Regala, previously a top state regulator of the medical marijuana industry, left the company in 2016 after just eight months on the job.

Last fall, the company's chief medical officer and chief financial officer resigned, with Bachman citing "personal and professional reasons."